To recap, Andy asked me, “what are your thoughts about The Economist’s special report on climate change last week, in which they conclude that the risks of climate change, and the likely manageable cost of mitigation, warrant the world, and especially the US, taking prompt action?”

He continues, “This is, obviously, a magazine with impeccable liberal economic (not to mention journalistic) credentials, and one of the sponsors of the Copenhagen Consensus that raised questions about the wisdom of prioritizing climate change. I believe they would not have taken this editorial position five years ago. Do you think they are mistaken in doing so now? What do you see as the salient evidence they missed, if so?”

The special report consists of a number of articles examining the issue of climate change and are available for purchase as a PDF set here.
In general, I found The Economist’s editorial to be written in a clear and straightforward manner, free from much of the fear-mongering and polemic that marks much of these debates. The gist of the editorial is based on the findings of the special report, summarized as follows:

Climate change is complicated and uncertain, but, as our survey this week explains, the underlying calculation is fairly straightforward. The global average temperature is expected to increase by between 1.4ଌ and 5.8ଌ this century. The bottom end of the range would make life a little more comfortable for northern areas and a little less pleasant for southern ones. Anything much higher than that could lead to catastrophic rises in sea levels, increases in extreme weather events such as hurricanes, flooding and drought, falling agricultural production and, perhaps, famine and mass population movement.

In light of the evidence, The Economist decides that it is worth it for “the world to spend a small proportion of its income” to avert the risk of a “climatic catastrophe.” I would note that this is essentially an economic assessment, a cost-benefit analysis, and it is one that concludes that the level of the risk outweighs the damage of sacrificing a “small proportion of its income.”

Unfortunately, the closest the editorial comes to actually calculating the “small proportion” so far as I can tell is in the following statement, “the slice of global output that would have to be spent to control emissions is probably not huge. The cost differential between fossil-fuel-generated energy and some alternatives is already small, and is likely to come down.” So just which is the cost of reducing emissions, “small,” “not huge,” or something else? These are, of course, relative terms, so “small” for me may not be “small” for you.

The editorial also notes that the Kyoto protocol was at least partly successful, because “European Union countries and Japan will probably hit their targets, even if Canada does not.” I’m not sure this is true. The last reports I heard about the protocol noted that a at least few EU nations were having trouble meeting their targets, although admittedly that information may be out of date.

I do think the editorial makes an excellent and often overlooked point in this paragraph about the looming presence of India and China:

The United States is the world’s biggest producer of greenhouse gases, though not for long. Every year China is building power-generating capacity almost equivalent to Britain’s entire stock, almost all of it burning coal—the dirtiest fuel. It will shortly overtake America, and India is not far behind. Developing countries argue, quite reasonably, that, since the rich world created the problem, it must take the lead in solving it. So, if America continues to refuse to do anything to control its emissions, developing countries won’t do anything about theirs. If America takes action, they just might.

Andy’s assertion that simply because The Economist was a sponsor of the Copenhagen Consensus that they agreed with its findings is rather tenuous. To my knowledge, the magazine did print a number of articles summarizing and debating the findings on climate change, including various sides of the argument. I’m not familiar with the editorial history of the magazine, however, but it is notable how different this editorial’s conclusions are from those of the Copenhagen Consensus.

The methods of the two are essentially the same: attempting to do a cost-benefit analysis of proposed solutions to various global threats. In 2004, the Copenhagen Consensus found that neither carbon taxes nor cap-and-trade schemes such as Kyoto were good solutions, rating them in the “bad projects” category. By contrast, The Economist endorses either of these schemes as part of the solution, while recommending “the more efficient carbon tax.”

The 2006 Copenhagen Consensus, held in June, again rated these proposed tools quite low: the Kyoto Protocol at 27 out of 40, and three different carbon taxes last at 38, 39, and 40 respectively.

I applaud The Economist for looking at another aspect of the issue that is often overlooked regarding the possibilities for “carbon sequestration.” There are two major ways to deal with CO2 in the air: reduce emissions into the air and/or increase the rate at which CO2 is taken from the atmosphere. The vast amount of attention has been placed on the former rather than the latter.

I’m not as optimistic as the editorial about the size of the economic costs for these significant carbon taxes and cap-and-trade schemes. And having attended Tom Ackerman’s lecture, “Global Warming: Fact or Fiction,” I have seen first hand the rhetorical power of the infamous “hockey stick,” the legitimacy of which has come under increasing scrutiny. If the temperature record is only reliable up to 500 years, I’m not convinced that this is enough of a data set to responsibly make such huge predictions. So, in general, I don’t agree with, or at least remain agnostic about, The Economist’s conclusions on the economic viability or the environmental urgency of climate change.

I do think, however, and have written before, that there are plenty of compelling reasons other than the potential threat of climate change for petroleum-based economies to move toward renewable and sustainable sources of energy. In this, I might venture to guess that Andy and I are in broad agreement.

The disagreement may come in with respect to our views of the acceptable time horizon for what I’ve called the transcendence and obsolescence of petroleum (my timeline being somewhat more elastic than Andy’s). This presumably manifests itself in Andy’s emphasis on the necessity for government action while I am less inclined to resort to coercive legislation.